Carney’s Canada After 1 Year: What’s Working (and What’s Not)

One year after Mark Carney’s stunning rise to power, how is his government actually performing?

In this episode, we break down the biggest political upset in recent Canadian history, from the collapse of a presumed Conservative victory to the Liberals’ unexpected dominance. Is Carney delivering where it counts?

We grade the government’s performance across the issues that matter most to Canadians:

The rising cost of living and inflation
The worsening housing affordability crisis
A fragile job market, especially for young Canadians
Canada’s high-stakes relationship with Donald Trump and the United States
Ongoing challenges in immigration policy and planning

Along the way, we explore why older voters have become a decisive political force, whether Canada is drifting toward a two-party system, and why there’s a growing disconnect between political popularity and real-world performance.

Is this government all talk, or are the foundations being laid for long-term success?

Chapters:

00:00 Intro: One Year After the Election, Carney’s More Popular Than Ever
00:00:30 Looking Back: How the Conservatives Lost a “Guaranteed” Win
00:02:13 The Senior Vote That Reshaped Canadian Politics
00:03:25 Grading the Government
00:04:36 Issue #1: Cost of Living
00:09:04 Issue #2: Economy & Jobs — Youth Employment Concerns
00:13:44 Issue #3: Trump, Trade & Canada–U.S. Relations
00:16:20 Issue #4: Immigration — Lack of Long-Term Plan
00:20:22 Issue #5: Housing Affordability — Mixed Progress
00:22:19 Ontario Housing Deals Change the Grade

Research:

https://x.com/DavidColetto/status/2043400016639983755/photo/1

https://abacusdata.ca/liberals-lead-by-6-by-elections/ 

https://www.ipsos.com/en-ca/liberals-open-double-digit-national-lead-over-conservatives-advance-elections 


The Hidden Job Market Crisis No One Is Talking About
https://youtu.be/UcTsszcmVbo?si=1o3ECKoYBZk5uDTn

Hosted by Mike Moffatt & Cara Stern & Sabrina Maddeaux

Produced by Meredith Martin

Funded by the Neptis Foundation https://neptis.org/

Transcript

SPEAKER_01 0:00

It's been one year since the federal election, and the Kearney Liberals have, if anything, gotten more popular relative to the opposition. In that election, they finished two and a half points ahead of the conservatives in the popular vote. Today, the polls have them anywhere from six to fourteen points ahead. But popularity and performance aren't necessarily the same thing. Today we'll be grading the Kearney government's performance on five issues of importance to middle class Canadians. Classonomics, hosted by Sabrina Maddow and Mike Moffat.

SPEAKER_00 0:30

Last year, on March 14th, Mark Kearney became prime minister, rivaling only my birthday as the most important March 14th in Canadian history. And then soon after that, we had a federal election and the Liberals won, but they didn't quite get the majority they wanted. At least not right away. So, Sabrina, what do you remember about that election and that campaign?

SPEAKER_01 0:51

Well, the downfall of the conservatives for over a year prior, it was assumed that the conservatives were going to be the next government. It wasn't even a question. They were so far ahead in the polls, and it seemed guaranteed. And then when Carney came in, and certainly with also the issues with the United States contributing to a very different uh environment and psychology among the electorate, everything just flipped so quickly. And here we are now with a Carney majority a year later. It was surprising enough that he won the election, but then that he's translated it into a majority since then is huge and completely unexpected from where we were just over a year ago.

SPEAKER_00 1:35

Yeah, I mean, I didn't really see all this kind of floor-crossing happening. You know, I will say that, you know, I felt like the last couple weeks of that election campaign just felt like a sleepwalk that, you know, the liberals kind of cost themselves as a majority a little bit. And the big thing, you know, for me being a kid from East London was seeing the NDP basically get eliminated in all these kind of blue-collar uh ridings. So, you know, I think that's a trend worth watching to see if you know we are moving to uh at least in English Canada, a uh two-party uh system, or you know, if we're going to continue to have an NDP and a Green Party and some of these smaller parties.

SPEAKER_01 2:13

And the other thing we saw was how influential the baby boomer and senior vote was as well. They really carried the Kearney government into office. And as we'll talk about, I think that's influenced some of their policy choices and priorities since.

SPEAKER_00 2:26

Yeah, no, absolutely. And I think that senior's point is important because, you know, now we we're here, it's a year later, and the liberals are up about 45 to 33 in most polls against the conservatives. Uh, with the exception of Abacus, Abacus has it at 45 to 38. They use a slightly different methodology that's a little bit more forgiving to the Tories. And as you can imagine, there's a lot of debate on social media about that, but we'll let David Coletto speak for himself. But if we look at most of the polls, they all show similar dynamics when it comes to demographics. That the Tories are still competitive with the liberals among most age groups. But as you're pointing out, like the liberals have this massive lead uh with older voters. You know, our friends at Ipsos finds that roughly half of voters age 55 and up would vote liberal if an election were held today. And Abacus finds the same thing for her 60s and up. So overall, you know, they had this massive advantage during the election. And I think if anything, that's just gotten stronger.

SPEAKER_01 3:25

And we've seen just a huge gap in different age groups, younger versus older Canadians, in their policy priorities, their issue sets, especially for older Canadians. They've been really seized with the geopolitical climate and the threat coming from south of the border on trade and tariffs and sovereignty. Um, and because of that, I think some cost of living, housing affordability issues have taken more of a back seat than I would have expected.

SPEAKER_00 3:50

Yeah, absolutely. And I think it all gets around to that idea that uh popularity is not performance. Uh, that if a party is speaking about a certain uh topic or issue uh that is important to a certain demographic, they're likely to do well with that. But, you know, I'd like to look at performance because you and I thought it would be a useful exercise to actually grade the performance of the first year of the Kearney government. You know, go through what are they doing well and where are they struggling? So, what I did is I I picked five issues of importance to middle class Canadians based on that most recent abacus poll. And I thought we could assess the performance of the government on each one. So, are you ready to play the role of professor and hand out some grades in April? I am. Let's do it. So, the number one issue of Canadians by far is the rising cost of living, with two-thirds of all Canadians citing it as a top three issue. And Abacus finds that voters who care about the issue give a slight edge to the Tories on this one, but it's close. There's a little of a uh bias in the Abacus poll or statistical bias in the Abacus poll towards the conservatives. So I think we can pretty much call it even. So when it comes to the rising cost of living, how would you assess the Carney's government's performance on the issue and what grade would you give them?

SPEAKER_01 5:08

I'd say it's pretty middling. I'd probably give a B or a B minus. Uh, and I do that because some of it is outside of their control. Obviously, what we're seeing internationally with geopolitics, with war, with supply chain issues, with some of the tariff threats from the states, there's only so much that any government would be able to do to influence or hedge against those factors. But at the same time, for me, I think that the Kearney government could have been more aggressive in addressing cost of living, whether that's through tax reform, even cost of living ties into employment as well. And we'll talk about that later. But Canadians need to make good wages and they're not making good wages, and especially younger Canadians are having a hard time even finding jobs, which compounds the issue. So they haven't moved with as much urgency on this as I would have liked to see. But what are your thoughts?

SPEAKER_00 5:57

Yeah, I'm kind of with you. So I'll leave the job piece aside because we're gonna get that to a moment. But if we're just looking at consumer prices, I agree that there's not much governments can do in the short term. And, you know, in the short term, I think globally we've been okay. You know, the inflation rate has been 2.4% over the first year of the Kearney government. You know, we we had an uh episode recently where we talked about that that data and how, you know, to actual Canadians it could feel above that. And we'll link to that in the show notes. But overall, you know, we we've got a Bank of Canada that has a mandate to keep inflation around 2%. We're at 2.4%. And, you know, most of the policies that governments can use uh to make life more affordable is by reducing taxes on certain things. And the government's done that, the Kearney government's done that. Like if you look at the very first policy Kearney had pretty much on my birthday, was to eliminate the consumer carbon tax, you know, which ended up being quite popular and kind of you know reversed one of uh Trudeau's signature initiatives and really kind of cut the legs under Polyev. He's recently reduced uh gas taxes, albeit temporarily. So I'm gonna give him a split grade here that overall I'll give him a B plus on affordability that, you know, inflation's been decent and they're trying things. But uh as somebody who's voted Green Party most of his life, I got to give him an F on climate that, you know, it seems that their affordability initiatives are all undoing a Trudeau era climate policy. Now, I know for a lot of conservatives, they see that as a great thing, but somebody who comes from the environmental movement, I look at this and I go, like, really that's where we're we're gonna get our uh affordability uh benefits from, from scaling back a climate policy.

SPEAKER_01 7:44

I'm not sure. See, I'm gonna be the conservative side here and that we should have climate policy through taxation. I think if you want the public to buy into climate policy more broadly, uh, it can't have always negative impacts on their wallets and their quality of life. And that seems to be the way that governments were dealing with climate for a long time. I'd like to see more investments in innovation, major projects, um, allowing Canadian firms who might have interesting tech solutions for various aspects of business related to the climate to be able to start up and compete here and get investment. And we've seen a little bit of movement there, but there's still so many gaps.

SPEAKER_00 8:21

Yeah, absolutely. And you know, the the public's with you. They're they're not with with me uh on this one. So it's completely understandable uh that the government would do this. And I think it's a lesson for the environmental movement that you can't just try and get good policy enacted, but you know, you're not going to uh have the ability to continue to have those policies if the public isn't on board. So I I think it's completely understandable what what they've done. So I'm gonna look at the the next issue, and I'm actually gonna lump a couple together because I think they're interrelated. So Abacus has the economy in quotes as the number two issue, and job security and unemployment as the number nine one. Now, I was a bit surprised that unemployment was number nine, but here we are. And anyhow, like like before, voters who care about these issues have the two parties in a dead heat. So, how well would you say the Carney liberals are performing on uh economy and job security and unemployment?

SPEAKER_01 9:19

Job security in particular is a big red flag for me. I'd give them a D, especially for young people. The challenges in the job market are just massive. We're in a low hire, low fire environment. So we are seeing more and more layoffs, but the problem is if you do leave a job or you get laid off, no one is hiring. So we're seeing longer-term unemployment surge as well. And we haven't had any really meaningful reform of the EI system to address that, or a lot of people falling through the cracks. At the same time, while immigration numbers have come down slightly, and there's um have been rollbacks on international students, even temporary foreign workers, there's still too much competition for Canadians and people already here who are looking for jobs. And there seems like there's been a reluctance to address that at the scale that I think is necessary for the current environment. Even just the transparency around unemployment and the level of layoffs we're seeing. I mean, so many companies don't necessarily do huge mass one-time layoffs now. They're just in the state of forever layoffs, particularly companies that are profitable and getting government money or enjoy government protections. Doing that, I think needs a closer look as well.

SPEAKER_00 10:30

Yeah, I think all that's fair. And I love when you do uh callbacks to uh old episodes, whether or not that was uh intentional or unintentional. So we'll we'll link to the episode where we talk about that low higher, low fire equilibrium. Yeah, overall, I'm kind of middle of the road here that, you know, I look at GDP growth as one of the indicators. It's been under 1%, but it's been positive. You know, there were real concerns that over the last 12 months we would have a recession. We haven't had one yet. We are projected to be the second fastest growing G7 country this year in terms of GDP, but it's still really low, right? Because of all of the things that are happening geopolitically. So it's not that we're growing well, it's just that everybody else is doing terrible. And speaking of terrible, you're absolutely right that the labor market for youth is just awful right now. And I've been a bit surprised that we haven't seen more activity from government or even more acknowledging of the issue. So it's a difficult thing for governments to, you know, immediately correct, but usually there's a little bit more acknowledgement uh that there's an issue there. Haven't really seen it.

SPEAKER_01 11:43

It feels a bit like the housing crisis where governments and politicians just did not want to talk about it for so long until it reached such epic proportions. And that's my worry with especially youth unemployment and longer-term youth unemployment as well, right? Um, because this isn't something that even if young people eventually make their way back into the workforce, lifetime earnings are impacted, productivity is impacted. I mean, there's so many ripple effects here. And to me, I'm not seeing the Carney government take it at the level of seriousness that I think it should. And at the same time, um the stats on, for example, entrepreneurship are terrible at the moment. Entrepreneurs who actually hire other people are at huge lows compared to pre-pandemic still. We never made that rebound. So on the other flip side, we have unemployment being an issue, but we're not enabling people to, if they can't find, you know, that traditional full-time role, start their own businesses and hire others by doing that as well.

SPEAKER_00 12:39

Yeah, absolutely. And I, you know, I suppose in their defense, I would say that again, a lot of that is the kind of thing that you can only kind of correct in the long run, but you do need to acknowledge that it's a problem. And I also worry about the kind of lack of those kind of long-run policies that, you know, I see a lot of talk at kind of like a 30,000-foot level about, you know, addressing competitiveness and being able to build infrastructure, you know, major projects and all of these things, but I'm not seeing much activity. I've seen a lot of talk, uh, but not much actually get done. So I'll I'll give them a see here. I need to see a lot more, I think, in year two, uh, because this year, you know, I'm willing to give them a little bit of a pass because they're new, but I think that they've got to ramp this up because we're not seeing much in the short run. We're seeing a lot of rhetoric for the long run, but not a whole lot of action. So I'm gonna skip around a little bit and look at issues where one of the parties has a big advantage over the other. So, according to Abacus, the fourth most important issue to Canadians is Donald Trump and his administration. And of the voters who put it as a top three issue, so not all voters, but just voters who really care about this issue, the liberals have an absolutely massive advantage over the conservatives, with nearly two-thirds of those voters who cited as an issue saying that they would vote liberal if there was uh an election today. So, you know, that's popularity again. But if we look at actual performance in terms of outcomes, I'd love to get your take.

SPEAKER_01 14:07

I'd give them another B here. Obviously, there are ongoing issues, and then we have Kisma uh renegotiations coming up, but a lot of that has been effectively out of their hands. When you have a president who changes his mind by the day, sometimes by the hour, right, and doesn't negotiate or hold himself to agreements in the way that I mean politicians in the United States have done for years and years and decades. Um, that's a problem. So Carney is doing, I think, what he can overall. And it's difficult as he also has to walk a fine line with voters who, you know, really want to see him stand up, elbows up to the states, but at the same time, that can turn off people. There we go, uh, in the negotiating room as well, right? So it's really tricky. But the key here is that there's really no alternative to them in terms of the conservatives or the NDP coming up with an approach or comms or anything cohesive on this that is clicking. The other parties just seem to not know what to do, or at least not be able to do what they need to do in a way that keeps their base happy, but also appeals to the broader public. So Kearney comes out looking better no matter what, largely because of the others' failures as well.

SPEAKER_00 15:18

Yeah, and I think that that's a theme in a lot of these. But yeah, overall, I think the idea that there's some deal to be had here right now with the current U.S. administration, I think is just fantasy. You're absolutely right that Kearney has to walk a line where, you know, we have to deal with the US, but he also has to deal with uh domestic political concerns. Uh, and given that his audience is seniors up here who don't necessarily have to worry about their job uh because they're retired, uh, you know, they are a little bit more elbows up. They're old enough to remember uh Gordy Howe. Uh, you know, so they are a little bit more aggressive in a way that probably doesn't help Carney uh deal with uh with the U.S. So I'd say there's a few missteps here, but overall, I think the government has played this exceptionally well. So I'm gonna give them an A. I I could see people even giving them an A plus. I think that's a little generous. Uh, I do think there have been a few missteps, but overall, I've given them A, no complaints. Now, the flip side of the Trump issue is immigration, the sixth most important issue to Canadians. And of those who rate it as a top three issue, the Tories have a massive lead over the liberals. It's almost an exact inverse of their assessment on the Canada-U.S. relationship, you know, with the conservatives having about two-thirds of those voters. Do those conservative voters have a point?

SPEAKER_01 16:42

Yes, I would give the government a C on this one so far. There obviously have been some changes, like we said, with international students, temporary foreign workers, but there doesn't seem to be a plan beyond the next two years on where immigration goes in this country and how it is sustainable long term. And there are still issues with temporary foreign workers competing with Canadians for jobs, but beyond even just the numbers argument, the corruption in the immigration system, in that the auditor general had a report come out a few weeks ago where we see that basic checks and balances aren't happening for immigration applications. Um, a lot of people are here who shouldn't be. We aren't tracking exits properly still. Organized crime comes into play. Um when visas do expire, we have no way of actually ensuring that people are leaving. And at the same time, we're expending huge costs when it comes to taxpayer-funded health care for applicants, even applicants who are denied, the asylum systems amassed. There are just so many aspects of the immigration issue that the liberals have been scared to touch, but need to if Canadians are going to have faith in the system long term and if our immigration system is going to work for the country again, both on an economic level, but socially and culturally as well.

SPEAKER_00 17:59

Yeah, I would say your, if anything, your C is generous, uh, that uh the government really hasn't done anything. And that is uh that is not a compliment. You know, that that both the run-up of population growth and and the climb down was the previous government. You know, there were a lot of policies there, some bad, some good, but that was all the previous government. This government really hasn't done much. Uh, we have an immigration minister who is not a good communicator, cannot kind of let us know what's going on. And there's so much uncertainty right now around the future of immigration rates, the future of international student policies, uh temporary foreign worker policies, and so on, that the current plans only extend to the end of 2027. And that lack of a long-term plan is deterring investment. Like if you are a developer who wants to build a high-rise rental condo doesn't really matter. Part of what you're betting on is the future rate of population growth. And if you don't know how fast the population is going to grow, it makes that investment riskier. So you're less likely to do it, even if it, you know, on net would be a decent project. So I really want to see this government come out with a 10-year plan and say, this is what we see the future looking like. And then industry and business uh can make their investments uh accordingly. You know, obviously you and I have our views on what should be in that plan. You know, I definitely think we have to tamp down on the use of temporary foreign workers uh even even further. But overall, the government needs a plan. They don't have one. So I'm torn. I could either give them an incomplete grade, which is prosper allowed to do. Instead, I'll just say a D. I really don't think this is going well for the government.

SPEAKER_01 19:47

No, and it's an issue that's only going to become a bigger political liability for them over time as well, because the public is paying attention. It's an issue that's in the media and making headlines from multiple angles all the time. Um, and it's something they need to get serious about.

SPEAKER_00 20:02

I think you're absolutely right. I think, you know, it's not hurting them that much right now because, again, it's the kind of the number six issue. But if the salience of that issue increases and the fact that the Tories lead on this something like 60 to 20, it's going to be a massive problem for the liberal government. And finally, because we're the missing middle, we have to talk about housing. Housing, affordability, and accessibility ranks fifth overall as an issue, with 42% of voters citing it as a top three issue, saying that they would vote liberals, 36% preferring the conservatives. So the liberals have a slight lead, but it's not massive. What's your take on this?

SPEAKER_01 20:40

Also, a lower grade. I'd give a D here. Um, the housing crisis continues. It's no longer just a crisis for one demographic being first-time buyers, but also second-time buyers and um older Canadians now as well, seniors looking to downsize. Everyone is suffering here. And it's not something that is ever going to be fixed overnight. I mean, you're limited obviously by how quickly you can bring supply online. Um, and this will take several years to correct, but they have not been as ambitious as I would have expected. And they haven't even fully lived up to all the housing promises they made in their platform.

SPEAKER_00 21:17

Yeah, I think we have to assess the government based on policy, not outcomes, because it takes a very long time uh to build a home. And and six weeks ago, I would have agreed with you. I would have given them a very poor grade. I actually probably would have given them a D minus. You know, they they have had some action, but you know, there's no MERB program. And that was one of the big promises during the campaign. They haven't moved on that. And the ones they have moved on, like Build Canada homes, it's got governance issues. There's a lack of targets. It's not, uh, it doesn't seem particularly well designed. And as well, they, you know, there are pre existing programs that I don't think are working too well under the current government. Uh, so the Housing Accelerator Fund, uh, which was a Trudeau era program. This government really hasn't been enforcing the requirements on municipalities to the kind of strength they need to be. So six weeks ago, I would have said a D minus, but I'm going to be a lot more generous now because the federal government has signed two really important deals with the province of Ontario. One eliminating HST on new homes under a million dollars for the next year. And a second program that reduces development charges by up to 50% for three years. You know, those are temporary, but while they're in effect, I think they're massive game changers. You know, it's good, it's only one province. So I'll say a B minus for now, but this year is absolutely pivotal.

SPEAKER_01 22:43

And those policy changes are big. And to me, they're just a start, but they need to go so much farther on this. And it also ties into the immigration issue as well, um, because that has spiked over the years, demand for housing, especially in certain university towns, especially in urban centers. And there's no plan right now for how they're going to rebalance immigration and housing long term, which is a big red flag for me.

SPEAKER_00 23:06

Yeah, and I think that's kind of the big theme of this episode is that you know, there's a lot of great rhetoric, uh, there's a lot of good talk, but the policies aren't there. There's a lack of plans, and they're not meeting the ambition that this government has set through their rhetoric.

SPEAKER_01 23:25

Thank you everyone for watching and listening. And to our producer, Meredith Martin, and our editor, Sean Foreman.

SPEAKER_00 23:30

And if you have any thoughts or questions about Gordy Howe, uh, please send us an email to missing middle podcast at gmail.com.

SPEAKER_01 23:37

And we'll see you next time.